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Arbitration Panel Decision Under the Randolph-Sheppard Act

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Department of Education.


Notice of arbitration panel decisions under the Randolph-Sheppard Act.


The Department of Education (Department) gives notice that on May 3, 2010, and April 19, 2011, an arbitration panel rendered decisions in the matter of Art Stevenson v. Oregon Commission for the Blind, Case no. R-S/07-4. This panel was convened by the Department under 20 U.S.C. 107d-1(a), after the Department received a complaint filed by the petitioner, Art Stevenson.

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You may obtain a copy of the full text of the arbitration panel decisions from Suzette E. Haynes, U.S. Department of Education, 400 Maryland Avenue, SW., Room 5022, Potomac Center Plaza, Washington, DC 20202-2800. Telephone: (202) 245-7374. If you use a telecommunications device for the deaf (TDD), call the Federal Relay Service (FRS), toll-free, at 1-800-877-8339.

Individuals with disabilities can obtain this document in an accessible format (e.g., braille, large print, audiotape, or computer diskette) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT.

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Under section 6(c) of the Randolph-Sheppard Act (Act), 20 U.S.C. 107d-2(c), the Secretary publishes in the Federal Register a synopsis of each arbitration panel decision affecting the administration of vending facilities on Federal and other property.


Art Stevenson (Complainant) alleged that the Oregon Commission for the Blind, the State licensing agency (SLA), violated the Act and its implementing regulations in 34 CFR part 395. Specifically, Complainant alleged that the SLA improperly administered the transfer and promotion policies and procedures of the Oregon Randolph-Sheppard Vending Facility Program in violation of the Act, implementing regulations under the Act, and State rules and regulations in Complainant's bid to manage the Marion County vending route comprised of vending machines at the Oregon Department of Public Safety Standards and Training (DPSST).

On May 1, 2006, the SLA issued a vacancy announcement for the DPSST vending route. While the posting did not indicate that the DPSST campus would be closed, i.e., that trainees would not be permitted to return home on weekends, the SLA communicated this information at an early May meeting with the Blind Enterprise Consumer Committee, of which Complainant was a member. On May 20, 2006, the SLA informed Complainant that his bid had been accepted. On July 27, 2006, Complainant signed a vendor's operating agreement with the SLA to manage the DPSST vending route. Subsequently, on August 1, 2006, Complainant informed the SLA that he would continue to operate his current vending route in Multnomah County (Multnomah) until September 30, 2006.

On August 10, 2006, staff of the SLA informed Complainant that the Multnomah vending route was being put out to bid. On August 22, 2006, a vacancy announcement was sent to all eligible vendors. Another vendor submitted the only bid for the Multnomah vending route and he was awarded the Multnomah vending route contract on September 6, 2006.Start Printed Page 48832

On September 28, 2006, Complainant requested from the SLA a two-week extension on relinquishing the Multnomah vending route to the new vendor, citing low sales figures for the DPSST vending route. The SLA agreed to the extension of Complainant's request to delay turning over the Multnomah vending route to the new vendor.

At a meeting on October 3, 2006, a DPSST official informed the blind vendor and SLA for the first time that the DPSST had decided to operate the DPSST facility as an open campus in which trainees were allowed to go home on weekends. At the same time, the SLA learned that the DPSST cafeteria was selling items in competition with Complainant's vending machines.

On October 4, 2006, Complainant filed a grievance with the SLA requesting an administrative review indicating that “there are several issues that must be addressed before I relinquish my current status as the Multnomah County vending route manager.” Following Complainant's request for an administrative review, staff of the SLA met with him and suggested alternatives to supplement Complainant's income at DPSST. However, Complainant declined the offer and requested that he be permitted to continue operating the Multnomah vending route. The SLA denied Complainant's request. However, Complainant continued to operate the Multnomah vending route until mid-2008. On June 13, 2008, SLA staff directed Complainant to turn over keys to the Multnomah vending route to the new vendor and Complainant complied with the SLA's request.

Subsequently, Complainant filed for a State fair hearing. The SLA held a State hearing on this matter. The SLA adopted the hearing officer's decision to deny Complainant's request to continue operating the Multnomah vending route as final agency action. It is this decision on which Complainant sought review by a Federal arbitration panel.

Arbitration Panel Decisions

After hearing testimony and reviewing all of the evidence, the panel majority ruled on May 3, 2010, that Complainant did not have the right to rescind the August 1, 2006, notice of termination of his operating agreement with the SLA for the Multnomah vending route. The panel majority concluded that the change in circumstances in the DPSST vending route was the result of DPSST's unilateral decision to open the campus. It was undisputed that DPSST decided to open the campus after the bidding ended and that it did not inform the SLA of this change until after the vendor complained of unexpected low earnings soon after he began operating the vending machines.

Thus, according to the panel, the SLA was not responsible for the change simply because it occurred at the outset of the operation of the DPSST vending route instead of a month or a year into the operation. Moreover, based on information at the time of the bid, Complainant had no reasonable expectation that he would receive sufficient income from just servicing the DPSST vending route—especially since the vacancy announcement for DPSST informed bidders that additional vending would be a significant part of the DPSST vending route. Finally, when the SLA official became aware of the decision to open the campus, he immediately mitigated the impact by offering additional vending and also promptly objected upon learning that the cafeteria was selling similar items.

The panel majority also ruled that Complainant was not entitled to be restored as the manager of the Multnomah vending route. This was based upon the finding that significant inequities would have ensued had Complainant been allowed to rescind his decision to relinquish the Multnomah vending route. By the time the SLA learned of DPSST's change to an open campus, the new vendor at the Multnomah vending route had already incurred significant cost to prepare to service the Multnomah vending route. Therefore, allowing Complainant to retain the Multnomah vending route would have caused real economic harm to the new vendor.

Accordingly, the panel majority concluded that the SLA did not violate the Randolph-Sheppard Act. The panel majority denied Complainant's motion for summary judgment and granted the SLA's motion for summary judgment.

One panel member dissented from the panel majority's decision stating that Complainant had a right to rescind his agreement to operate the Multnomah vending route. This panel member concluded that, if the SLA had acted upon Complainant's rescission request promptly, no additional harm would have occurred to Complainant or the other vendor. As a remedy, this panel member would have awarded damages in an appropriate amount to Complainant for the SLA's failure to rescind his agreement in a timely manner.

On July 27, 2010, following the panel's submitting the final decision to the Department, Complainant submitted to the panel a Request for Reconsideration. However, the request did not identify any specific issues that remained to be addressed. After consultation, the panel requested by e-mail, dated August 2, 2010, that Complainant articulate the specific issues in his view that were within the panel's jurisdiction under the Randolph-Sheppard Act and identify remaining issues in light of the panel majority's ruling on May 3, 2010.

On August 17, 2010, Complainant responded to the panel with a list of eleven issues. After reviewing the list, the panel majority concluded on April 19, 2011, that Complainant had not presented issues warranting further hearing in this matter. Specifically, the panel determined that it did not have jurisdiction to consider three of the issues because they had not been addressed at the State level first. For the remainder of the issues, the panel determined that they had either already been resolved or were moot. Therefore, Complainant's Request for Reconsideration was denied.

One panel member dissented in part and concurred in part from the panel majority. This panel member dissented stating that Complainant had not waived his right to a hearing on the SLA's alleged inappropriate administration of the Randolph-Sheppard vending facility program regarding the DPSST vending route.

The views and opinions expressed by the panel do not necessarily represent the views and opinions of the Department.

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Dated: August 4, 2011.

Alexa Posny,

Assistant Secretary for Special Education and Rehabilitative Services.

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[FR Doc. 2011-20231 Filed 8-8-11; 8:45 am]